Collecting Payments: Tips for Freelancers to Protect Themselves

Getting paid is one of the biggest challenges facing freelancers today.

After putting in hours of hard work, it can be incredibly frustrating to have to chase down clients for payment.

Unfortunately, clients failing to pay freelancers on time (or at all) is an all-too-common occurrence, as can be seen from weekly and even daily complaints on LinkedIn about clients taking months on average to pay.

The freelance economy is not going anywhere. It can be very lucrative and often provides work that gives the same or more pay as a full-time role. Or it can support people with extra income who need some more money.

Over 200K+ WordPress projects have been completed on Freelancer.com alone. Millions more must be done through other platforms or directly between the freelancer provider and clients. And still, freelancers have trouble getting paid by clients who nevertheless demand high-quality work on time.

To avoid such common scenarios, we present some actionable tips to help freelancers get paid for their work and avoid problematic clients. With the right precautions, you can protect yourself from non-payment or late payments that put your freelance business at risk.

Get a Deposit Upfront

Getting a deposit upfront from a new client is one of the best ways freelancers can protect themselves before starting work. I recommend asking for 25-50% of the total project cost upfront before you begin.

An upfront deposit helps ensure the client is invested in the project and incentivized to continue working with you. It also provides you with funds so you can comfortably start working without having to worry as much about non-payment later on.

With the deposit in hand, you can purchase any materials, software, or assets needed for the project with the confidence that you will at least recover these costs. The remaining payment can then be scheduled upon completion of clearly defined milestones or delivery of the final product.

Just be sure the deposit is specified in your project proposal or contract. I recommend 25% of the total for shorter projects or 50% for longer, multi-month engagements. Alternatively, you could request part payments at different time periods or milestones. This ensures you aren't left doing free work if the client decides to ghost you mid-project.

We do understand that this isn’t feasible for all freelancers, especially new ones. However, once you establish yourself in the market and clients know your value, they will be more willing to give you your deposit.

Use Contracts

Having a strong contract in place before starting any freelance engagement is one of the best ways to protect yourself and ensure you get paid. The contract should clearly spell out all payment terms, including:

• When payment is due (e.g., 50% upfront or 15 days after delivery and so on)

• Exact payment dates and milestones associated with each payment.

• Your late fee policy - make it high enough to deter late payments (e.g., 1.5% per month)

• Steps you will take to collect late payments, including sending to collections, suspending work, etc.

Get all of this agreed to upfront and have the client sign the contract before you start working. This gives you legal recourse if the client tries to wiggle out of paying. The clearer you are about payment schedules and repercussions for late payments, the more likely you'll avoid issues.

You might have to invest in a proposal or contract tool, but you’ll find that such an investment is worth the time and hassle saved when you have legal proof of expectations and processes.

Send Invoices Properly

Be sure to send invoices on time and as specified in your contract terms. The invoice should clearly state the payment amount owed and preferred payment methods, which could include options like bank transfer, PayPal, credit card, or even wallets. Today, payments are easier than ever to make and online wallets will become 52% of all payments online in 2025. This makes it easier for businesses and clients to pay you - not harder and you should remember that when you make your contracts and invoices.

I also suggest using a payment platform or contract tool that has templates for these matters.

Also, create emails with templates for reminders or for sending invoices.

Whatever you do, make sure you create a professional invoice with clear terms, amounts, and your service provided to collect payments smoothly and avoid late or missed payments.

Use Escrow Services

Escrow services allow a third party to hold payment in escrow until work has been completed and delivered. This gives both the freelancer and the client assurance during the project.

Popular freelance sites like Upwork offer escrow services to protect both parties for anyone who uses its service. When a new contract is started, the client funds the escrow account. Once the freelancer completes the work and the client accepts, the funds are released from escrow to the freelancer.

Using escrow services like those offered by Upwork reduces the risk that a client will fail to pay for completed work. However, you’ll also pay a steep price to use the platform.

You can use other third-party dedicated escrow services like Refrens and others.

Using escrows helps you feel confident that payment is secured, and your client knows they won't pay until they've received the finished product.

Screen Clients Thoroughly

Before accepting a new client, it's important to do your due diligence and thoroughly screen them. This can help avoid working with clients who may have a history of payment issues or are difficult to work with. Here are some tips:

• Research the client's reputation and background. Search online for reviews, complaints, news articles, social media accounts, etc., to get a sense of their business practices.

• Ask for referrals. Reach out to people who have worked with them before and ask about their experience. Also, request samples of projects they’ve commissioned to evaluate their expectations.

• Check for any public records of lawsuits, tax liens, etc., that may indicate financial issues. Search court records and other public databases if you’re working on a large project. For most cases, a simple Google search will do.

• Avoid taking on clients that seem evasive, rushed, or refuse to provide references. Be wary if they push back against screening requests.

Vetting clients thoroughly on the front end can help avoid nonpayment and other issues down the road. Trust your gut instinct if something seems off about a potential client during screening. It's better to turn down work than risk not getting paid.

Have a Collection Process

It's important to have a clear process or workflow for collecting fees, especially ones that are late or unpaid. This will help ensure you handle them in a consistent and professional manner. Here are some tips:

• Follow up at 15-30 days late with an email and/or phone call to politely check on the status of your payment. Remind them of the amount owed and the due date.

• Be firm but still professional in setting expectations for payment. For example: "As outlined in our contract, payment is due within 30 days. Let's discuss how we can get this resolved."

• Outline the next steps if payment is still not received after the initial follow-up. For example, pausing work, adding late fees, involving legal counsel, etc. Explicitly stating your policies shows you are serious about getting paid.

• Escalate accordingly if there is still no response after multiple attempts.

• Keep documentation of all attempts to collect payments.

Having a process gives you clear steps to follow up professionally while still reinforcing that you expect to be paid per your agreement. Be persistent and consistent to show you are serious about getting owed payments.

Conclusion

Your final option is to take up legal help - which is not something anyone wants. But if the project is big enough and you feel it’s necessary, then it may be your only option.

Protecting yourself financially as a freelancer is crucial to running a successful business.

With the tips and advice outlined above, you will be better equipped to avoid nonpayment, handle late or unpaid invoices, and take necessary action when needed.

Don't be afraid to take action to get paid for your hard work and talent. Often, a stern email is all that’s needed. Or a bit of research can prevent you from giving your time to businesses that don’t intend to honor your agreement.

Your time and effort are valuable, and you deserve to be compensated for it. Remember to always prioritize your financial security as a freelancer. There are plenty of great clients out there who will value your work and pay you fairly, so don't settle for less.